Who shorted gold after fed’s announcement last week?

Open interest in COMEX gold increased by 1,209,600 ounces in the two days following the fed's announcement last week. Can anyone explain to me who in their right mind would short gold following the fed's plan to double its balance sheet?

Date

OpInt

12/5/2008

263295

12/10/2008

261001

12/26/2008

290765

1/27/2009

354159

2/17/2009

355377

2/20/2009

358829

2/24/2009

369132

2/25/2009

372697

OpInt steady

2/26/2009

373339

OpInt steady

2/27/2009

376482

OpInt steady

3/3/2009

367342

OpInt steady

3/4/2009

365271

OpInt steady

3/5/2009

366226

OpInt steady

3/6/2009

369979

OpInt steady

3/9/2009

373397

OpInt steady

3/10/2009

375875

OpInt steady

3/12/2009

369763

OpInt steady

3/13/2009

376596

OpInt steady

3/17/2009

375090

OpInt steady

3/18/2009

376237

fed's announcement

3/20/2009

388333

two days later


388333
376237 minus
12096 increase in Open Interest (1,209,600 ounces)




Conclusion: Attempts to suppress gold prices are now obvious and desperate. The game will soon be coming to a close.

This entry was posted in Gold, Market_Skepticism, News_Developments. Bookmark the permalink.

24 Responses to Who shorted gold after fed’s announcement last week?

  1. Martijn says:

    Well... the world basically cannot afford to loose the dollar, although it seems that control is slipping a bit.
    However, there is a lot to gain for many parties in finding an alternative, and they will try their very best. Gold would only need to hold until that alternative is accepted, which it might.

  2. Anonymous says:

    Hi Eric I am not an economist but have purchased some gold,silver and oil related shares in my cdn rrsp for protection from fiat devaluation.I am becoming concerned that the unlimited resources of the fiat producers give them the ability to manipulate the PM market almost at will.-etfs,shorting,JPM to buy Barclays I-SHARES etc. It seems they make up the rules as they are desparate to eliminate the competion.How does the game end? Thx for your great insights.

  3. Anonymous says:

    I would start with the custodian of the GLD etf....

  4. Anonymous says:

    its free market capitalism at its best. That's why we export to the entire world, by force when necessary. Now, move along and don't tinker with things you don't understand.

    Hi eric. Another great post and we appreciate your watchful eye.

  5. When "gold" prices are going down, the gold lease rates are going up.
    Can you enlighten me, why?

    (Say if the car prices are going down, their lease prices usually going down even more. The clowns of free market and supply/demand "analists" always pointing to these correlation in commodities.)

  6. Anonymous says:

    If I were to attribute good intentions to them, which I don't, I'd say this is an effort to prevent a disorderly unraveling of the dollar, i.e. a panic. It's frustrating for gold owners (of which I'm not one), but there it is.

    Another less benevolent view is they are trying to keep everyone in the fiat system long enough to be completely shorn and enslaved.

  7. OperationNorthwoods says:

    Shareholder,

    The endgame is the big question. Currently, the financial coup d'etat is going fairly smoothly, but it could explode at any moment. My advice would be to have physical gold in your possession. Paper gold has the full faith and credit of somebody behind it, and a lot of those somebodies are friends of the fiat kings.

  8. Anonymous says:

    I own miners through RBCDI and if that paper becomes worthless and only physical is good-well I refuse to go there as I have no intention of buying a gun to protect the physical. I sure hope it dosen't come to that. Shareholder

  9. Martijn says:

    Isn't gold becoming a hype???

    For illustration take remarks like this one: “Investors would be wise to buy some gold, whether or not gold goes up, down, or remains unchanged next week,” Tom Hartmann, a commodity analyst at AltaVista Worldwide Trading LLC in Mission Viejo, California, said on March 19. “The larger picture here is greater than a one-week time frame. Inflation is certain to come.”

    (http://www.bloomberg.com/apps/news?pid=20601012&sid;=aEwTUJiZpWM8&refer;=commodities)

    Sounds a bit like the real estate market doesn't it? Buy a property, do not care about price movements it is guaranteed to go up...oops..

  10. Eric,

    Could you publish/comment this article, as your blog the readers may want to discuss it.

    http://www.freebuck.com/articles/jwillie/090219jwillie.htm

  11. Anonymous says:

    Hello Eric,

    here an interesting article about a call for a new world currency:

    http://finance.yahoo.com/news/China-calls-for-new-global-apf-14729023.html

    http://www.pbc.gov.cn/english/

  12. Anonymous says:

    A MODEST PROPOSAL

    CFTC official Bart Chilton openly responded to the complaints of Ted Butler and GATA of

    silver manipulation on the Comex by explaining that Mr. Butler fabricated and exaggerated

    his data to fit his argument.

    Before I lay out a modest proposal to Mr. Chilton, I would like to say that based on Mr.

    Butler's 20-plus years of devoting his entire career to studying every aspect of the silver

    markets, I will assert that Mr. Butler's data and conclusions are far more worthy of

    respect and believability than are the empty accusations of a Government regulator who

    hides behind secretive data and untruthful assertions. In fact, I will go as far to say

    that Mr. Butler knows more about the silver market than any market professional knows about

    any market that I have ever studied, including my professors at the University of Chicago.

    Now, Mr. Chilton has openly asserted that there is conclusively no evidence of price

    manipulation in the silver market going on at the Comex. Let's look at the facts, and

    purely facts, as determined by price, supply and demand in the market.

    We know that there is a shortage of physiclal silver preventing U.S. Mint from producing

    enough silver eagles products to supply the demand of the market (the same set of facts

    apply to gold). How do we know this? You can go to the U.S. Mint's website where they

    explain that they had to suspend production of all gold and silver eagle minted products

    except 1 oz. coins due to a shortage of gold and silver bars.

    We also know that for over a year now, that there have been substantial premiums observed

    in the transactional market globally for gold and silver fabricated products (bars, coins,

    etc), well in excess of the transactional prices taking place on the Comex. This is evidence of extreme backwardation in the marketplace, which means that there is a severe supply shortage and the futures prices are way too low. Premiums of this magnitude point a massive demand well in excess of supply.

    Now, by decree of the simple LAWS of supply and demand economics, the shortage of supply

    and the price premiums for the supply that does exist, the market price for silver is too low. How do we know this? Because when there is a shortage, buyers bid up the price to a level that induces more supply and reduces demand until the price reaches a point at which supply and demand are balanced. Price is the ultimate allocator in any economic model. It is an undisputed LAW of economics.

    If the price of silver were allowed to rise to it's natural economic level in which supply

    and demand are balanced, the U.S. Mint would not have to suspend production, premiums on

    coins and bars would disappear, and the market would achieve a high degree of

    price/supply/demand balance.

    Absent the existence of this natural economic balance, we can ONLY conclude that the price

    is too low, and that the mountains of evidence produced by Mr. Butler and GATA can only

    point to the existence of extreme price manipulation on the Comex. There is no other

    explanation. Rather than throw out patently false accusations unsupported with proof, I

    openly challenge Mr. Chilton to dispute the evidence and proof of the TRANSACTIONAL

    MARKETPLACE with all the data he can openly produce under the Freedom of Information Act.

    His failure to do would only add to the proof as outlined above.

  13. Anonymous says:

    Well, as an alternative, less tin-foil-hat-like interpretation:

    Gold had to have already been priced with the expectation of the Fed monetizing US debt. The market doesn't move on news, it moves weeks in advance of it. The insiders and big money had already moved into position.

    Perhaps the short-seller(s) thought that the market was anticipating more printing than the Fed announced and thus concluded that gold was overpriced.

    Still though, I think it's more likely that the price is being suppressed as y'all are suggesting.

    What I'm wondering is how short-selling can possibly be a viable strategy for suppressing a price?

    Is it that it changes the sentiment of technical players?

    Because otherwise, when the shorts are inevitably forced to cover (how long do most contracts last?), the price will shoot up even faster than it would have naturally.

  14. Anonymous says:

    of course the insiders knew of this mega rally ahead of time. Just look at 1-min chart of XLF and SPY, among others, and you can see the positioning. And even though we are overbought to the hilt, it still goes up on trivial volume.

    Yes, they will drag gold down, paper gold anyway. They want that money back in the equity market.

    All this manipulation goes on, when we supposedly have fed regulators overseeing the markets. One way to end this is for everyone to pick up their chips, and go home. But, that would be unamerican, now wouldn't it!

  15. Anonymous says:

    Eric If you could elaborate on"The game will soon be comming to a close."Something that we have not heard? THX

  16. OperationNorthwoods says:

    Anon,

    How you choose to protect your life, liberty, and the pursuit of happiness is one thing. But another is if you are so optimistic as to think there's no chance of a speculator's tax of 90% on "undeserved" profits from mining shares. The pirates in charge can and do change all the rules when it suits them. Only physical items are safe from this, and that includes a well-stocked pantry. A gold share in a 401K may never get to you.

  17. Anonymous says:

    NW:You have some ideas that I will have to consider.Thx for the posts.SH.

  18. Jeff Burton says:

    OperationNorthwoods - you are exactly right. Governments become incredibly confiscatory when theirs backs are against the wall, far more than you could ever imagine (just read a little history). They will call it a "Windfall Profits Tax" or something else. No one will object because 99% of the population won't be affected. The fact that envy is a huge unspoken motivator in human relations means that the majority will be cheering the gov't on. Which is why I have warned here that relying on your fellow citizens' "outrage" over unfair gov't tactics is a losing strategy.

  19. Anonymous says:

    Eric,
    You are officially superfamous now. Being talked about by one of the legends.

    http://jsmineset.com/index.php/2009/03/25/demand-side-of-gold-will-carry-the-day/

    Dear CIGAs,

    1. Has it ever struck anyone that 1.1 billion dollars in today’s world is chump change? When the time comes, demand for gold will smash through a modest one point one billion dollar hole "in the dyke" wall of a quadrillion plus dollar problem.
    2. You are giving the supply side of gold banks too much credit when it is the demand side that will carry the day.
    3. Spamming the question below everywhere might well be in support of gold bank sales, knowingly or inadvertently.
    4. Eric, spam this if your intentions are really supportive of gold.
    5. If you received what is below but do not get what is above from the same source one question is answered.

  20. Bowtie says:

    I can't even make sense of what that guy jim sinclair wrote.

  21. Anonymous says:

    The answer by Jim Willie :
    http://www.gold-eagle.com/editorials_08/willie032609.html

    it's JP Morgan

  22. It is also shorted silver (JP Morgan inherited major short position from Lehman). More than 70% of Comex silver is shorted. US Mint enjoy more than 20% premium over the spot now.

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